Valley Grande puts oil lease money to old projects

Published 11:34 pm Tuesday, May 6, 2014

VALLEY GRANDE — The city of Valley Grande won’t be using their $36,000 in oil lease money to help pay off the amount they owe on a 80-acre piece of land after all, but the money is already being put to good use.

During Monday’s city council meeting, Mayor Wayne Labbe said the city was unable to determine if it would be legal to use the oil lease money — which is earmarked for capital improvements — to pay off a portion of the $140,000 the city owed on the property that is home to the Valley Grande Sports Complex.

Instead of forging ahead with their original plan, Labbe and the city council decided to use the money to reimburse the city’s general fund for recent construction projects at the park.

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“We never could get a definitive answer on using the capital improvement money, so basically what we’ve done is we’ve paid for the fences, bleachers and anything that qualified — which are capital improvements — out of that particular account,” Labbe said.

According to Labbe, the reimbursements totaled more than $29,000, meaning the remainder of the oil fund money would remain to be used on future capital improvement projects.

“We still have a few thousand dollars in there, so if in the future we decide to get some voice equipment out there [at the sports complex], we would have some money left in the account for that instead of bringing it out of the general fund,” Labbe said.

He said the city has paid off $40,000 of the debt using general fund money and borrowed $100,000 from Marion Bank and Trust to pay off the remainder.

Labbe said the monthly payments to Marion Bank on the new three-year $100,000 loan would be $2,900, but he added that the city would pay $3,500 each month and the extra money would go toward the principal.

Putting extra money toward the principal would allow the city, if it is operating in a strong financial condition at the time, to pay off the remaining debt in two-and-a-half years to coincide with the end of Labbe’s and council’s term.

“We as a council have set the goal of getting the city out of debt by the end of our term,” Labbe said. “So, at that time, we will look at what kind of financial shape we are in and we may decide to just pay it off then so we can go out as a debt-free council.”